Gold Futures Reach Six Week High
Gold futures have jumped to a six week high due to declines in equity markets. On Tuesday over $100 billion was wiped from world equity markets with global shares falling again today. Gold extended gains against the dollar, which experienced its worse loss in a month against a basket of ten currencies.
The metal has increased 9 percent from a four year low with signs that Europe, Asia, and other nations will increase their money supply.
“There are equity market concerns and an increase in the flight away from risky assets to quality,” James Steel of HSBC Securities (USA) Inc. in New York, told Bloomberg. “Gold seems to be benefiting from that more than anything else.”
Gold futures for February increased 3.1 percent, closing at $1,232 per ounce, with the price reaching $1,239, the highest price for an active contract since October 23.
“Stimulus from every corner of the global economy is now entrenched, and that’s bullish for precious metals,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, told Bloomberg. “This is a change of sentiment in a huge way, because investors stopped looking at U.S. interest rates possibly rising next year, to see the fact that every other major economy is easing at a breakneck pace to try and quell the slowdown.”